Ogra stopped from issuing notification

13 February, 2013

ISLAMABAD: Despite court orders declaring GIDC Act, 2011 as illegal, petroleum ministry has now stopped Ogra from issuing a notification of decrease in CNG prices resultantly the consumers would be deprived of getting a relief up to Rs16.56/kg.

ISLAMABAD: Despite court orders declaring GIDC Act, 2011 as illegal, petroleum ministry has now stopped Ogra from issuing a notification of decrease in CNG prices resultantly the consumers would be deprived of getting a relief up to Rs16.56/kg.

Islamabad High Court (IHC) on 31-01-2013 in a decision on GIDC said, “Gas Infrastructure Development Cess Act, 2011 is declared Ultra Vires to the Constitution, void, an infringement to the fundamental rights, offensive to principles of fair play, equality, transparency, social justice, good governance and tantamount to exploitation. GIDC enactment is also besides the dictums laid down by the superior courts of the country. It is further declared that levy and collection of GIDC is illegal. Respondents are restrained from making demand of GIDC, and the amount already received on this account has to be adjusted in future bills of the petitioners.”

Sources privy to the development informed TheNation that Petroleum ministry summoned Chairman Ogra on Tuesday and stopped the regulatory authority from issuing a notification of decrease in the price of commodity ostensibly owing to possible increase in the consumption of CNG. The ministry's stance on the matter during the meeting was very clear that since Ogra was not a stakeholder in the court decision and there were SNGPL, SSGCL and petroleum ministry. While on the other hand, Ogra has prepared a working paper for issuing a notification of reduction in the commodity prices, sources said, adding, that in accordance to said working paper, CNG price in region-1 comprising areas of Potohar, KP, Balochistan was proposed to be decreased by Rs16.57/kg and Rs11.47/kg decrease in region-II including areas of Punjab and Sindh.

Owing to absence of advice to decrease the prices of compressed natural gas (CNG) from the ministry of petroleum & natural resources (MPNR) despite passing a decision of Islamabad High Court (IHC) on Gas Infrastructure Development Cess Act, 2011 some 12 days earlier, Ogra on Monday wrote a letter to the ministry requesting it to issue advice on the subject to decrease the price of commodity in light with the decision of court. However, state owned SSGCLand SNGPL after the decision of court suspended collection of cess from CNG, cement, industrial, fertilizer and power sectors. Even, collection of Rs1656/kg (263/mmbtu) from CNG consumers is not included in the bills issued yesterday (Tuesday) to the CNG stations. And, around Rs80 billion has been collected from gas consumers under the head GIDC.

When contacted with legal brains to get their point of view on the matter, said that both Ogra and ministry of petroleum are bound to decrease the price of CNG with immediate effect after the decision of Islamabad High Court.

Sources told that Ogra in a bid to issue a decrease in the price of CNG in the light of IHC decision requires the advice from petroleum ministry as imposition of tax is a federal subject so it is the ministry who issues advice to the regulator to impose or vacate tax and Ogra itself has no powers in this very regard.